Brace for more tariff-related price hikes at Walmart. The retailer's CEO says the company expects its costs to increase in the third and fourth quarters.

In a Thursday earnings call, Doug McMillon said the company has been “keeping our prices as low as we can for as long as we can." However, "as we replenish inventory at post-tariff price levels, we’ve continued to see our costs increase each week, which we expect we’ll continue into the third and fourth quarter."

Trump is currently imposing 20% to 30% tariffs on electronics from China. Imports from Taiwan and Vietnam, two other major electronics suppliers, also face a 20% tariff.

To blunt the impact, many vendors rushed to bring in goods from China and diversify sourcing to other markets. Even so, Walmart has in some cases already been forced to raise prices. But according to McMillon, consumers have continued spending, with Walmart raking in $120.9 billion in Q2 in the US, up 4.6% from the year before.

“Their behavior has been generally consistent. We aren’t seeing dramatic shifts,” he said, noting the company has still found ways for price rollbacks on some products. “The way things have played out so far, the impact of tariffs has been gradual enough that any behavioral adjustments by the customer have been somewhat muted.”

Still, he added: “Not surprisingly, we see more adjustments in middle- and lower-income households than we do with higher income households.” For products that have seen price hikes, Walmart shoppers are buying less or switching to other items or categories.

Walmart mentioned the cost increases a day after Sony announced it was raising the price of the PlayStation 5 by $50 in the US.

Amazon’s CEO says, "We haven’t yet seen diminishing demand nor prices meaningfully appreciating. We also have such diversity of sellers in our marketplace, over 2,000,000 sellers in total, with differing strategies of whether to pass on higher costs to consumers that customers are advantaged [when] shopping at Amazon.”

By: DocMemory
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